What is a personalized customer experience?
Whether it’s with online retailers or in physical stores, we like to shop where we feel valued and buy from businesses we trust. At its simplest, that is what a truly personalized customer experience offers.
In much the same way that you’d rather put your faith in a friend than a stranger, organizations that tailor their shopping experience with personalization tend to attract and keep customers – and those that don’t, don’t.
So what do we mean when we say a ‘personalized customer experience?’ Well, it’s the art of using customer data to adapt your offering.
That could mean something as simple as addressing them by their first name in an email, rather than ‘dear customer,’ or it could mean employing the latest in experience management software to tailor specific offers, personalized recommendations, or even the entire purchasing journey in real-time.
These days, we interact with customers across a wealth of channels – email, social, in-store, over the phone, via apps, and more – and the more you personalize the customer journey on each of those touchpoints, the better their experience will be.
Does a personalized experience really impact results?
Yes. And, what’s more, all signs point to greater personalization efforts becoming a necessary part of day-to-day business.
Today’s customers expect personalization as standard. They know about the tools available to businesses and marketers, they know that they’re often handing over their data to the companies they do business with, and they expect that the reward for that should be personalized experiences. Salesforce research shows that 79% of customers are willing to share data to that end – rising to 88% if the result of that data share is personalized offers.
Most importantly, research shows that offering a personalized customer experience based on feedback and relevant data can directly impact a business’ bottom line.
80% of customers are more likely to do business with brands that provide a personalized experience.
Recent Accenture research, for example, found that 48 percent of consumers said that they expected specialized treatment for being a good customer, while 33% of surveyed customers who’d ended a relationship with a business had done so due to a perceived lack of personalization.
Gartner backs this up, citing that some 38% of their customers surveyed stopped buying due to lackluster personalization. Epsilon Research, meanwhile, finds the opposite to be true: 80% of customers are more likely to do business with brands that provide a personalized experience.
How hard is personalizing the customer experience?
We get it: you’re concerned that diverting marketing spend into tailoring the customer experience might be more of a time sink than it’s worth. But that’s demonstrably not the case.
Recent McKinsey data, for example, suggests that nailing customer personalization can deliver eight times the associated ROI. We know, too, that 42% of customers cut their spending with a brand after a bad experience – and that in today’s market, a bad experience and a non-personalized one can be the same thing.
But beyond that, the good news is that it’s never been easier to sift through customer data, understand customer feedback, track a customer’s purchase history and monitor multiple channels all at once, thanks to the proliferation of AI in experience management tools.
With the right software doing the heavy lifting for you, delivering personalized customer experiences becomes a simple case of choosing what to track, reacting to suggestions, and fine-tuning things based on what you learn.
Related Article: Everything you need to know in 2022
How to personalize the customer experience
So now you know the benefits for, and reasons why implementing personalized experiences across the customer journey, we need to look at how. Here are some suggestions around how you can implement personalization at any scale.
1. Understand your current customer experiences
You can’t personalize the customer experience without first understanding what customers want, and exactly how things are for them right now.
At Qualtrics we like to talk about monitoring ‘X-Data’ and ‘O-Data’, so let’s explore those first:
This is short for ‘experience data’, and essentially means the ‘human factor’ data — the beliefs, the emotions, and the sentiments. X-data is the human feedback that points to the gaps between what you think is happening and what’s really happening.
Short for ‘operational data’, O-Data is sales and finance figures around customer activity and retention – quantitative records of tangible activities. O-data is helpful because it tells you about win rates, profitability by product line, and where sales are coming from. Most companies do pretty well with operational data because it feels automatic, but it’s easy to take for granted.
Monitoring both together
The key to understanding the customer experience is to monitor both X-Data and O-data together – tracking not just what was sold and where, but how customers felt about it.
The simplest way to do this is by soliciting direct customer feedback through surveys. Ask customers how their experience has been, posing questions about personalization that can lead to insights about what to change first.
2. Boost personalization efforts with AI
Artificial intelligence can do the heavy lifting for you when it comes to understanding what customers are saying – and can suggest tweaks and responses for you.
Experience iD, for example, can intelligently decipher meaning and sentiment from customer feedback and interactions across touchpoints, using real-time customer data to make personalized adjustments in response.
Has someone had a bad customer experience recently? Offer them a personalized offer the next time they visit your site to try and get them back onside. Was their last visit a roaring success?
Welcome them back and point them to more things you know they might like. That kind of intelligent personalization is only really possible at scale with automated listening.
Moreover, when you’re using the right listening tools you can build much better segmentation that drills down into your customer data.
Grouping your audience by gender, age, and location is a bit old-hat. Modern segmentation is hyper-focussed, providing an easier way to personalize at scale, as well as enabling personalized customer service where agents already know a customer’s entire purchase history.
3. Think: Omnichannel
Similarly, it pays to think about every touchpoint that your customers visit, and try to connect the dots for them. That means tracking customer data so that, for example, a customer support agent manning the phones already knows that a customer has expressed a problem on Twitter, or that loyal customers are receiving the right offers for them via email.
Ask yourself: which touchpoints are customers interacting with (or about) you on? And how can you offer more personalized experiences that span across all of them?
The answer is usually by collecting and harnessing data. Lots of it. Again, the right software tools can help you here, by sifting through seemingly disparate data from a multitude of channels and finding links that tie customers into much more focused groups.
Related Article: What is an omnichannel experience?
4. Orchestrate the customer journey
Customer journey orchestration can be a powerful way to minimize abandoned shopping carts, but that’s mainly because when you’re making proactive changes to the customer journey you’re showing you know your customer better than ever before.
By using customer experience management software, you’ll be able to listen out for opportunities and pain points across every relevant touchpoint and connect that to customer segmentation data to produce no-nonsense, data-driven, actions by way of more personalized experiences.
Getting personal with data
Has a customer signed up for your service but forgotten to verify their email? Send a personalized email to remind them. Has a customer bounced off of a purchase, and later left a bad review about the process on a third-party site?
You’ll be the first to know about it. With that knowledge, not only can you make efforts to fix that point of friction, but you can send that user a personalized offer that incentivizes them to return.
After all, if you’re only capturing static, siloed data, you’ll only be able to make broad, generic changes. Dynamically tailoring the customer journey for specific people, on the other hand, is the smarter way for brands to become customer experience leaders.
How Qualtrics can help
Qualtrics Experience iD is a next-generation experience management platform that wants to do the hard work for you when it comes to listening, analyzing, and auditing the data that drives personalized experiences.
By tracking behavior and trends on a customer-by-customer level, Experience iD not only shines a real-time light on pain points and areas for improvement in the customer journey but also surfaces opportunities for highly-personalized customer experiences that directly influence sales and customer expectations.
Those personalized recommendations, offers, and experience tweaks become easy to action when all the dots are joined up – across every touchpoint and for every customer on an individual, granular level. And that’s exactly what Experience iD can help with.